Correlation Between Chahua Modern and Ningbo Fangzheng
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By analyzing existing cross correlation between Chahua Modern Housewares and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on Chahua Modern and Ningbo Fangzheng and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Chahua Modern with a short position of Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chahua Modern and Ningbo Fangzheng.
Diversification Opportunities for Chahua Modern and Ningbo Fangzheng
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chahua and Ningbo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Chahua Modern Housewares and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut and Chahua Modern is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Chahua Modern Housewares are associated (or correlated) with Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of Chahua Modern i.e., Chahua Modern and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between Chahua Modern and Ningbo Fangzheng
Assuming the 90 days trading horizon Chahua Modern Housewares is expected to under-perform the Ningbo Fangzheng. But the stock apears to be less risky and, when comparing its historical volatility, Chahua Modern Housewares is 1.4 times less risky than Ningbo Fangzheng. The stock trades about -0.07 of its potential returns per unit of risk. The Ningbo Fangzheng Automobile is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,495 in Ningbo Fangzheng Automobile on November 28, 2024 and sell it today you would earn a total of 165.00 from holding Ningbo Fangzheng Automobile or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chahua Modern Housewares vs. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| Chahua Modern Housewares |
| Ningbo Fangzheng Aut |
Chahua Modern and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chahua Modern and Ningbo Fangzheng
The main advantage of trading using opposite Chahua Modern and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chahua Modern position performs unexpectedly, Ningbo Fangzheng can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ningbo Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| Chahua Modern vs. Hunan Investment Group | Chahua Modern vs. Henan Shuanghui Investment | Chahua Modern vs. Nuode Investment Co | Chahua Modern vs. Harbin Hatou Investment |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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